The average year these top five holdings were founded is 1865. In 1987, 150 years after P&G was founded some investors were probably saying: "P&G is an investment that provides safe but modest returns" or "too bad we missed the opportunity to buy it years ago when it was smaller".

You'll still hear these kinds of statements just about everyday on business news for businesses like P&G.

Yet, 20 years later in 2007, P&G's stock was up 1000% excluding dividends. How many back in 1987 would have expected that? By comparison, the S&P 500 was up a little over 400% during that period. This 1000% return happened even if you were unlucky and bought the stock before the 1987 crash* happened. It makes little sense to expect those kind of returns going forward but I never underestimate the economics of these franchises that seem "boring and safe". They reliably deliver good to great returns (at lower risk) with a time horizon that is long-term and, of course, if purchased at fair prices (ie. not 1999).

Adam

* If you bought it after the 1987 crash returns increase to ~1400% excluding dividends.